Pharmacy School Loans: Financing Your Degree and Managing Repayment

According to the 2024 American Association of Colleges of Pharmacy Graduating Student Survey, 81.8% of respondents borrowed money for their Pharm.D. degree. If you're considering or are already planning to go to pharmacy school, you might worry about how you'll pay for everything.

This guide explores pharmacy school loans, as well as scholarship and grant opportunities.

What are pharmacy school loans?

Pharmacy school loans are a type of financing to help you pay for your pharmacy degree. There are federal loans for pharmacy students from the U.S. Department of Education and private loans from banks and online lenders.

Federal student loans offer borrowers benefits like fixed rates, multiple repayment options (including income-driven repayment), and the potential for student loan forgiveness. Private student loans allow you to choose between fixed or variable interest rates and typically don't come with origination fees. However, loans from private lenders don't have as many repayment options or perks as federal loans.

Federal loans for pharmacy school students

Federal student loans should be your first choice when borrowing for pharmacy school. The competitive interest rates, flexible repayment options, and forgiveness opportunities can make the debt much more manageable.

Federal loans for pharmacy students typically include:

• Direct Unsubsidized Loans: This is the most accessible type of federal loan, as it doesn't require a credit check. You don't need to show financial need to qualify, and both undergraduate and graduate students are eligible. On the downside, there are annual and lifetime loan limits.
• Grad PLUS loans: Direct PLUS Loans for graduate students are known as grad PLUS loans since they're only awarded to graduate and professional students. To qualify, you must undergo a credit check and not have an adverse credit history, which refers to significant marks on your credit report like default and bankruptcy. One of the primary benefits of grad PLUS loans is that you can borrow up to the school-certified cost of attendance, minus any financial aid you receive.

Federal loans for pharmacy students are a great option because of their benefits. You can reduce the cost of monthly payments through an income-driven repayment (IDR) plan, and there are generous deferment and forbearance options if you experience financial hardship. Additionally, you may be eligible for student loan forgiveness if you meet certain requirements.

How to apply for federal student loans

To access federal financial aid, including student loans, you need to submit the Free Application for Federal Student Aid (FAFSA). First, you'll need to register for a Federal Student Aid (FSA) ID on StudentAid.gov.

From there, you can submit the FAFSA online. Be aware of school, state, and federal deadlines when working on your application. Completing the FAFSA takes about an hour, and you'll need to provide information about your income and financial assets. You must apply for a grad PLUS loan separately online after submitting your FAFSA.

Private loans for pharmacy school

Private loans for pharmacy programs are available from banks, credit unions, and online lenders.

The specific eligibility requirements for private student loans are set by each lender. However, one thing most private student loans have in common is that they're credit-based.

If your credit is strong, you may qualify on your own. If you don't meet the minimum credit score requirements or have limited credit history, many lenders allow you to apply for private loans with a cosigner.

A cosigner can unlock better interest rates and help you qualify for a private loan. But keep in mind that this person takes on the liability of the loan and is responsible for payments if the loan is delinquent.

You have more choices with private loans, as you can select either fixed or variable rates. But consider the pros and cons carefully.

“Private loans may offer lower interest rates but they do not offer the ability to put loans in forbearance if someone faces a financial hardship,” says L.J. Jones, a certified student loan professional and founder of Developing Financial.

“Additionally, private borrowers cannot put their loans in income-driven repayment plans. Both of these benefits give federal loan borrowers so many more options when determining the most effective way to pay back their student loans.”

If you take out private pharmacy school loans, review interest rates, terms, and other factors carefully. If you select a fixed rate, you'll know what you'll be getting throughout repayment. Variable rates fluctuate with the market.

Current private student loan rates

Loan forgiveness options for pharmacists

The average amount borrowed for a Pharm.D. degree program among all institutions is $170,956, according to the 2024 American Association of Colleges of Pharmacy Graduating Student Survey.

Though pharmacists' median pay in 2023 was $136,030 per year, managing a high amount of student debt can be tough. The good news is there are some options for loan forgiveness for pharmacists.

Public Service Loan Forgiveness (PSLF)

Only federal loans qualify for this program, and it has an employment requirement. To qualify for the PSLF program as a pharmacist, your employer must be a qualifying not-for-profit or government agency. After working for eligible employers for 10 years and making 120 total monthly payments, you may qualify for PSLF and have the rest of your pharmacy school loans wiped out.

“While many employers of pharmacists are private, such as retail pharmacies, it is possible to seek out employment in nonprofit settings,” says Glenn Sanger-Hodgson, a certified student loan professional and founder of Shonan Gold Financial LLC.

“Many hospitals, state and local departments of health, and even the military all qualify PSLF eligible employers,” he adds. “For pharmacists who aren't sure, they can always file their PSLF employment certification form to determine if payments made while working with that employer count.”

Income-driven repayment (IDR) plans

While there are loan forgiveness options for pharmacists, many of them have an employer component to them. Federal loan borrowers can access student loan forgiveness under certain conditions without an employer requirement.

“For pharmacists who want to pursue student loan forgiveness that is unrelated to their employment, enrolling in an income-driven repayment plan can also lead to forgiveness, typically after 20 to 25 years of on-time payments,” says Sanger-Hodgson.

State-based repayment assistance programs for health care professionals

Your state may have its own loan repayment programs that offer tuition assistance in exchange for serving in a designated health professional shortage area. For example, the California State Loan Repayment Program is available to pharmacists who qualify and provides up to $50,000 for the initial service obligation.

Employer-based loan repayment assistance

Some employers may offer loan repayment assistance or student loan reimbursement. For example, Walgreens offers a Student Loan 401(k) Match Program.

Through this program, Walgreens treats student loan payments as 401(k) contributions and matches student loan payments up to 4% of eligible pay.

Tips for managing pharmacy school debt

Managing pharmacy school debt can be challenging. Here are some tips to minimize borrowing and make student loan repayment easier:

• Create a budget in school: To ensure you only borrow what you need and live within your means, create a budget. Take advantage of local and school resources that may help lower costs.
• Research scholarships: To reduce your reliance on pharmacy school loans, research scholarships and grants. These can be local, from your school, based on your profession, and more.
• Consider refinancing after graduation: If you're not going after loan forgiveness and don't need income-driven repayment, student loan refinancing may help you cut down your interest rates. This can reduce your repayment costs. However, you won't be eligible for any federal benefits when you refinance with a private lender, so consider this option carefully.
• Look into income-driven repayment plans: Federal loan borrowers can sign up for an income-driven repayment plan that lowers their monthly payments to 5% to 20% of discretionary income for 10 to 25 years, depending on the plan. After that point, you're eligible for forgiveness.

“If you are on an income-driven repayment plan, consider reducing your adjustable gross income because that determines your monthly payments,” says Colleen Salchow, a certified student loan professional and owner of Salchow Coaching. “Have you contributed to an employer-sponsored retirement plan? Have you contributed to a health savings account or a dependent care account?”

You have a range of choices when managing pharmacy school debt. The most important thing is to choose something that works for your situation and financial needs.

“When it comes to student loan repayment plans, I encourage borrowers to review their options and, when they pick a strategy, to stick with it,” says Salchow.

“If a borrower wants to pay off their loans aggressively and has the flexibility to work where they want, so be it. If they want to pursue PSLF, document every payment and submit and verify your employment once a year and any time you change employers,” she adds.